The bigger the S/R , OR more pronounced they are the more important they are: You get this picture on the Daily charts.
Just like in real life. The bigger/richer guys have more power. And they play on a certain level.

I am a purely technical trader. And I don't trade with a lot of gadgets or beliefs.

The beliefs in market stopping of turning at round numbers
- My Response: If it turns so be it. The information will be displayed on the charts anyway.
The beliefs that pivots are important or that Fibonacci has legs
- My Response: Whatever... the market goes does what it does anyways, doesn't it. So why do I need tools that tell me to expect something that 'may not happen or may happen'. I flow with the market. No predicting. Its best to do that.

FWIW, my view is that the market is complex enough to include both the truths expressed by numbnuts in post #14 and also Porkpie in post #19.

Basically it comes down to orderflow. There are generally higher volumes of pending orders stacked at key levels that potentially act as a barrier to the momentum that numbnuts describes, and it becomes a question of whether there's enough momentum in the push to both absorb the stacked order volume, and then more to continue the move. If a pair, especially a major, is trending strongly enough, and and the move has heavyweight (e.g. central bank) backing, then it will likely blow through these S/R levels; otherwise there may be prolonged stalling, and possibly some kind of reversal at that level.

Jason Hoerr goes into more detail here, and also explains some the mechanics behind some possible trading strategies (note: I'm not affiliated to FXevolve in any way, but IMO they're definitely one of the better educational sites around).

Numbnuts also touches on the importance of correlations. Triangular equilibrium is another factor that enters the mix. Hence if (for example) GU and UJ are both trending strongly upward, then GBP > USD > JPY, and hence the probability of GJ (= GU x UJ) breaking resistance levels becomes even greater. Conversely, in another situation where price is seemingly dawdling, if both GU and GJ were to strike key resistance levels simultaneously, then the probability of a reversal is theoretically greater.

Anticipating reversals at key S/R is a valid way to trade IMO. The "no brainer trades" thread gives some good examples. To make it work, it's necessary to be able to identify key levels, preferably on longer TF charts, after which it's possible to set a tight(ish) SL and build some high RR trades. However, there are potentially many SR levels on a given chart, and trying to pick the most likely ones can be problematical. Hence the need for high RR to compensate for a lower win rate.

My point, now you are thinking 3 dimensionally. When GJ hits resistance and traders predict it to stall or reverse, they are predicting GU and/or UJ to do likewise. Most traders don't realise that though, they think only of the pair currently on their screen as an isolated vehicle.

And so on and so forth, I could go on and on adding every currency pair, commodity and equity exchange known to be correlated to each other. The equilibrium has as many sides as the mind can contemplate. That seems to make s/r levels on a single chart kind of redundant.

My point, now you are thinking 3 dimensionally. When GJ hits resistance and traders predict it to stall or reverse, they are predicting GU and/or UJ to do likewise. Most traders don't realise that though, they think only of the pair currently on their screen as an isolated vehicle.

Central banks have been known to protect certain levels on very rare occasions - very rare when you consider how often prices test these levels.

Flick back and forward between eur/usd and eur/gbp, you will easily see the two are highly correlated. When one goes up the other goes up, when one goes down the other goes down. What happens when eur/gbp approaches a resistance level? Will eur/usd stop and reverse too? Of course not - usd is much stronger than gbp, so eur/usd will go where it wants to go and eur/gbp will follow ignoring any s/r levels...

Ignored

Couldnīt agree more with the above post and the one from Porkie & Hanover. A while ago I made a topic regarding the importance of key levels and correlations. In my opinion its about the timing of impact from several currencies & inter market correlations at important key/confluence levels. It will in the end higher the odds for certain S/R either holding or breaking. Last half year I did not have any time to update this topic but if anyone is still interested, here you go, http://www.forexfactory.com/showthread.php?t=361684.

Why do we have to complicate everything? When price is ranging you better make sure your a bull at the breakout of resistance and a bear at the breakdown of support! Then add to your position at higher highs or lower lows or retraces of both.

When price is ranging you better make sure your a bull at the breakout of resistance and a bear at the breakdown of support! Then add to your position at higher highs or lower lows or retraces of both.

Ignored

Why do I have this feeling that you are advocating we buy at the top of the price range and sell at the bottom? And you are also saying we should keep buying at higher highs. You are scaring me. When this trend reverses we bought at the worst price in the market!

Why do I have this feeling that you are advocating we buy at the top of the price range and sell at the bottom? And you are also saying we should keep buying at higher highs. You are scaring me. When this trend reverses we bought at the worst price in the market!

How about buy low and sell high?

Oh,we are not complicating... Its complicated!

Ignored

The only thing I am advocating is that when price is flat(rangebound/no trend)I would be looking to take a position in anticipation of a breakout of support or resistance.Now if we are looking at a breakout to the upside and then a trending bull market the best position to have taken would have been a buy at the support of the previous range.This is not what most people wil do, they cash in their position at the top of the range and then see the trend develop missing out on big profits they could of had if they had held their nerve.So my point is taking a position when the market is flat is important when the trend develops your in position "A"and you can then add to your position at retraces or HHs or however you choose to add.